FCC Threat Forces Mobile Carriers to Adopt Overage Warnings
by: Jason Mick
Customers now won't have to obsess over their online statements in order to safeguard themselves
A source at Verizon Wireless (America's largest carrier and joint subsidiary of Verizon Communications, Inc.'s (VZ) and Vodafone Group Plc. (LON:VOD) customer relations department two and a half years ago related to DailyTech that overages of over $2,000 were "not unusual" and were "more common than you might think". The shock of such mega overages has been a growing concern, particularly as customers use higher data activities such as video calling, YouTube video viewing, wireless app downloads, and streaming internet radio.
Fortunately overage rates have started to come down over the last few years, but the situation today is still arguably far from great. The U.S. Federal Communications Commission appears to have taken a successful step towards convincing carriers to adopt steps to help limiting their overages.
Currently if a customer does not continuously monitor their usage, they may miss overages as they occur, only seeing them by the time it's too late. Now the Cellular Telecommunications Industry Association (CTIA) -- the wireless industry's biggest trade group -- has published a new set of guidelines that will force carriers to send text messages warning customers if they are roaming internationally or about to run over their allotted voice/data allotments.
Cell phone bill
Cell phone bills may come as a bit less of a surprise, thanks to new industry guidelines, which come after the FCC forced the industry into action to avoid regulation. [Source: Milk Your Money]
The rules allow the FCC to back off the almost identical regulation it proposed in October. The FCC crafted the proposal to force carriers to adopt text message warning after finding that one in six mobile phone users have experienced "bill shock" (unexpected fees on their monthly bills) and 23 percent of those users have faced overages of $100 or more.
FCC Chief Julius Genachowski lauded the new voluntary industry guidelines, stating, "Consistent with the FCC's ongoing efforts, these actions harness technology to empower consumers, and ensure consumers get a fair shake, not bill shock."
President Barack Obama also issued a brief statement praising the move, writing, "Our phones shouldn't cost us more than the monthly rent or mortgage."
Others were less enthusiastic. Some consumer advocacy watchdogs are upset that the FCC has back off of mandatory regulation and fear that telecoms may ignore the optional guidelines.
States Joel Kelsey, political advisor at the group Free Press told Reuters, "The FCC is charged by Congress to protect consumers and it should fulfill this mandate to write a rule that puts an end to outrageous monthly cell phone bills that rival the price of a new car."
But industry groups praise the effort, saying that it’s an example of the government and industry leaders working together to avoid onerous regulation. Comments Kathleen Grillo, Verizon senior vice president for federal regulatory affairs, "We hope that in the future this industry effort serves as a model for the communications space."
FCC Threat Forces Mobile Carriers to Adopt Overage Warnings
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